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Regular City Council Meeting <br />August 7, 2003 <br />Page 3 <br /> <br />to purchase slugs, or state and local government tailor-made government <br />securities put in escrow to pay off the 1993 and 1994 bonds when they become <br />eligible to be paid off. The 1993 bond can be paid off December 15, 2003, and <br />the 1994 bond can be paid off December 15, 2004. Mr. Almon said the city <br />is paying $65,000.00 for cost of issuance. The city is paying bond insurance <br />of $24,214.52, underwriter's discount of $43,973.50, accrued interest of <br />$9,342.24, and contingency of $1,610.04 for a total of $7,154,592.35. <br /> <br />Mr. Almon advised that on page 4 is the actual savings report and it shows <br />$505,340.00 in future value savings. He said at the bottom, they traditionally <br />present the value of that number and do not do it with arbitrary rates. They use <br />the added interest cost of the bond issue itself. That is just a part of the present <br />value and you can see by using the rate of 3.389 that future value savings <br />would present a value of$415,302.00 and that is 6.19% of the par value of the <br />prior issue or the bonds that you are refunding. <br /> <br />Mr. Almon said page 5 is the Bond Production Report and that actually shows <br />the deal points and all the specifics of the sale of the bonds. <br /> <br />Mr. Almon advised that pages 6 and 7 show the two bond issues that are being <br />refunded and how they are set to mature if you do not refund them. Page 8 <br />adds those two together showing the total debt service and total principal on the <br />1993 and 1994 bond issues. Page 9 actual shows how they are going to pay <br />and call out of the escrow that the city will create from the state and local <br />government securities. Page 10 gives an item by item breakdown of the cost <br />of issuance, and what it is referred to on the use of funds the cost of issuance <br />and the City Council can see his fee, Bond Council fee, Attorney General fee, <br />and those are consistent with their agreement with the city that they have <br />charged in the past. Mr. Almon said he did have to take bids for the banking <br />services because this is a new transaction where we have to pay them as paying <br />agency and registrar both on the new bonds as well as the old bonds. Then, <br />they have to pay one of the banks to be the escrow agent to hold the escrow <br />until the city can pay off the old bonds and their fees are collectively <br /> <br /> <br />